With the growing popularity of Homeaway.com, VRBO.com and Craigslist, the market for vacation rentals has grown to $24 billion, representing 10% of the total travel market, according to the latest research.
And it is set to keep growing.
While many of the top Internet sites in this sector are designed to directly link property owners with consumers, a number of lesser-known sites as well as major online travel agencies and professional property management groups are increasingly and aggressively reaching out to travel agents.
"There is a lot of interest among the vacation rental supply community in establishing closer partnerships with the travel agent community," said Rick Fisher, president of Vacation Home Expo, which will be held in Atlanta beginning Jan. 23 as part of the Atlanta Travel Expo.
The sector offers a new, potentially lucrative product for agents and agencies willing to branch out and spend some time getting to know this new and fast-growing segment of leisure travel.
"This is a market that is exploding, and there is very little competition" for travel agents, said Fisher.
Douglas Quinby, senior director of research for PhoCusWright, said there were two key advantages for agents who venture into the vacation rental space.
"One is that the ADR [average daily rate] booking rates are significantly higher than for hotels, and the average length of stay is higher: six nights vs. two," he said. "So this is a bigger booking value and ultimately bigger monetary reward for travel agents.
"Also, it is an area that I think presents an opportunity for travel agents to truly distinguish themselves from do-it-yourself online booking."
A new study by PhoCusWright suggests that travelers spent $24.3 billion booking vacation rentals last year.
"That represents a little less than 10% of the total travel market but a little more than a fifth of all hotel room revenue," Quinby said.
The study also suggests that only 10% of U.S. adults have ever booked a vacation rental but that the industry has unusually high customer satisfaction and an enviable repeat rate.
Vacation Home Expo's Fisher asserted that "vacation rentals today represent one of the fastest-growing leisure products, and this lodging segment is outpacing hotel growth in many of the most popular vacation destinations."
Still, many travel agents so far have shied away from the market for several reasons. For one, the market is fragmented, meaning there is not a good central source to find vacation rentals. In addition, much of the product is unknown and not professionally managed.
"There's a lot of mom-and-pop enterprises," Quinby said. "When you have that lack of branding, what that really means is there is a bigger issue of trust."
"The problem with [owner-to-consumer sites] is that you never know what you are getting," said Rob Kall, president of Bookt.com, which develops websites and other technology for the vacation-rental industry. "You might be renting a place where the owner is not there, and the faucet breaks and you are stuck."
The product is also more complex.
"It's like booking a cruise; there are a lot of decision steps," Quinby said. "With a hotel, you know a Marriott is a Marriott. With a vacation rental, there are lots of opportunities: How many bedrooms? Is there a full kitchen? Is it fully outfitted? Is there a pool? How far is it from the beach or the slopes? -- all of those things you are not sure of."
In other words, like a cruise booking, a vacation home rental involves "a hand-holding process that agents can help consumers get through."
But first, the agents need to know the answers to those questions themselves. And, say Quinby, Fisher and others in the industry, that has been the problem.
Traditional GDS listings are not conducive to vacation rentals because they are generally not long enough to list all the variables, and there are no pictures.
Quinby acknowledged that a handful of vacation rental companies do have very focused travel agent programs. These include Endless Vacations from Wyndham and ResortQuest.
A number of vacation rentals are also listed as part of GDSs or through sites like Hotels.com and Expedia, which have vacation rental tabs and offer commissions to agents who book through them.
But there are also an increasing number of vacation-rental-specific websites that offer travel agents programs and commissions in addition to direct consumer booking. These include Zonder.com, Villascaribe.com and Vacationroost.com.
And unlike Homeaway.com and VRBO.com, which list mostly with individual property owners, most work with professionally managed properties.
In addition to offering commissions to travel agents, many are also developing technological tools.
"The biggest challenge is that travel agents just don't know where to start," said Bobby Gibson, CEO of Villascaribe.com and several other affiliated sites that offer villa rentals around the world. Gibson said his company had always worked with agents but was now making a bigger push through the Vacation Home Expo and other arenas to make agents aware of its products.
"One of the things we are going to roll out this year," he said, would be "to start just giving them the tools," including websites branded to individual travel agencies.
"It's too expensive to get into the villa business when you have to build your own website," Gibson said. "We are going to be aggressive about helping them market properties."
Kall, founder of Bookt, said travel agents were on his radar almost from the beginning.
"I have a friend who owns a travel agency," Kall said. "When I was starting this business, he told me, 'I always have people coming to me for vacation rentals, and I really never know how to book them. ... Some are on the GDS, but the GDS doesn't do it justice. I want more information, photos, details.'
"We are actually working with some travel agents, who are coming to us and saying, 'Hey, can you help me build a portal for loading this type of thing?' "
But travel agents who don't want to build portals or linked websites can still book vacation rentals directly through a number of websites and collect commissions simply by entering their IATA code.
Sites such as Hotels.com offer agents a direct link from the agency's website to their condo page, and they pay a commission for every booking made by a customer who enters their site from the agency site.
"They don't even have to get on the phone," Fisher said. "It's all coded, and they get a 10% commission. I think that's a huge opportunity for travel agents."
With the downturn in travel resulting from the dismal economy, vacation rental companies are likely to continue courting agents.
"Let's face it, the travel industry is in for a tough, tough 2009," Gibson said. "But we really want to explain what our product is."
Bob Barnes, founder of Zonder.com, said he expects that over the next 12 months, most sites will become more "agent friendly," meaning they will make it easier to access their inventory and implement systems that can automatically track agents in order to get their commissions to them.
In fact, times have been so slow that even the Ultimate Escapes destination club, a private club that members join to get prepaid access to exclusive private homes and villas, has recently launched a commission program for agents.
Last month, Denver-based Ultimate Escapes said it would offer travel agents a 3% referral fee for any client who joins their club. While it might seem counterintuitive for an agent to refer a client to a program that will then cover four of that client's vacations a year, the membership cost to use Ultimate Escapes private homes and villas ranges from $70,000 to $300,000.
"Would you rather have 3% of $300,000 or 10% of $3,000?" asked Ultimate Escapes' chairman, Rich Keith.
Despite the increase in outreach to agents, experts say the vacation rental industry has a long way to go before agents embrace it in great numbers.
"It obviously takes a special person to put together and offer their own packages," Kall said. "It's obviously quite different from just looking into the GDS, and there is still a strong need for more standardization in the industry.
"There are no star ratings," Kall said. "It is hard to understand that, and one way this is being addressed is that some people do try to categorize their units in some types of categories. Some people bring in user reviews and get it straight from the horse's mouth."
But with a little work, Quinby said, the opportunities could be great.
"Travel agents who get into this space have an opportunity not just to win some of that vacation-rental business, but really to build relationships with very affluent, high-spending travelers," he said.